How the Labor Dept. Helps the INS Keep Sweatshops Profitable

During the past few years, the Immigration and Naturalization Service(INS) has embarked on a special program that targets undocumented workersat garment factories for deportation. In 1996, the INS raided scores ofsweatshops in New York City alone and arrested nearly 2,000 workers forillegal status. In some cases, garment companies – which depend heavilyon undocumented workers — have taken advantage of the raids by fingeringunion organizers for arrest.

And who is turning the workers in? In many cases the very agency thatis supposed to be protecting them: the US Department of Labor. CounterPunchhas learned that the Department’s Wage and Hour Division has been reportingto the INS when it comes across undocumented workers in the course of itsfactory inspections. In other words, if workers complain to Wage and Hourabout being cheated out of their overtime pay they’re more likely to getdeported than they are to recover the stolen money. “It has a significantchilling effect on workers and worker-based organizations,” said PeterRukin, attorney with the Latino Workers Center in New York. “We cannotassure a worker that information [given to Wage and Hour] will not be sharedwith the INS.” Rukin only refers complaints to the New York State Departmentof Labor, which is prohibited by state law from giving information to theINS.

Former Labor Secretary Robert Reich recalls that when he accompaniedWHD inspectors to garment factories, the workers were frightened and sometimeshid when they arrived. “The commitment to ridding our workplaces ofundocumented workers has been and continues to be a much higher prioritythan shutting down sweatshops,” he says.

To understand the political economy of American sweatshops requires abrief history lesson. In the 1940s and 1950s, US garment workers were highlyunionized and wages were at an all-time high. Salaries began to steadilydecline the following decade as industry fled south to seek non-union laborand then plummeted during the 1970s as globalization took hold and companiesfound even cheaper, more exploitable workers in the Third World.

Government policies as well as economic forces have contributed to thedownward pressure on wages. In the 1980s, the Reagan administration underminedthe domestic garment industry by encouraging US firms to locate abroad andproduce for export back into this country. The US Agency for InternationalDevelopment even provided subsidies for US manufacturers to relocate overseas.

Such policies have accelerated the downward spiral of the industry anddramatically reduced the number of domestic apparel jobs, which droppedfrom 1.45 million in 1973 to 750,000 in 1998. The decline in jobs and wagesdecimated the two big unions that represented garment workers, the InternationalLadies Garment Workers Union and the Amalgamated Clothing and Textile WorkersUnion (which merged to form UNITE in 1995). Not coincidentally, it was duringthis period that sweatshops began to regain their hold in the US.

As is the case abroad, domestic manufacturers and retailers pass ontosubcontractors the problems of holding down wages and disciplining workers.A 1997 Department of Labor survey found that in New York City, where theindustry is centered, nearly two-thirds of garment shops failed to complywith federal wage and hour laws. “The only ones who are making anymoney are the ones willing to steal from the government in taxes, cheattheir workers in wages and cheat the union by not paying health and welfarebenefits,” says a Department of Labor official. “If somebody triesto comply with the law they will not make anything in this business.”

Even as the industry pushes for lower labor costs, it is racking up billionsin profits. And while retailers claim to have no ability to police the conditionsunder which their clothes are manufactured, they hold tremendous power,partly because of the industry’s extreme concentration. The top 40 retailerscontrol 80 percent of the market, and the top ten control 65 percent. Thisgives them the power to set pay scales for the entire industry.

The retailers could ensure fair wages if they wanted to, argues MIT politicaleconomist Michael Piore. “The ultimate challenge of eliminating thesweatshop is really a political challenge, not an economic challenge,”he says. Piore, who has studied sweatshops in the US and abroad, explainsthat retailers closely monitor factory conditions but their concern is productionstandards, not working conditions. “There’s something morally crookedabout a system that cares more about quality than it does about human welfare,”he says.

The Wage and Hour Division’s contribution to this bleak state of affairshas been to further squeeze garment workers. The INS began targeting theindustry in 1996 — the same year that the Labor Department was at the heightof its anti-sweatshop effort – and many of the shops it raided were, accordingto Mark Thorn, a spokesperson for the New York INS office, based on referralsby Wage and Hour.

Wage and Hour’s cooperation with the INS stands in stark contrast tothe chilly relationship it maintains with a sister agency, the Occupationalhealth and Safety Administration. The GAO noted in a 199o report that thetwo offices barely communicated. Things haven’t gotten much better since,according to an OSHA official in New York. He estimated that in 1997, hisoffice got less than twenty referrals from Wage and Hour.

Enforcing workplace safety and fair wages is only possible if workersfeel comfortable filing complaints with the government agencies that aresupposed to protect them. But with garment workers knowing that a Wage andHour inspection might well be followed up by a raid by the INS, they haveno reason to come forward. “There is enormous pressure on a workernot to complain, because they think their job will be at stake,” saidSusan Cowell, the vice president of UNITE.

Consider a raid by federal agents on the STC sweater factory in Queens,New York several years ago. The factory’s managers were forcing employeesto work long hours without overtime pay and had threatened the workers ifthey tried to form a union. Unfortunately, the federal agents were fromthe INS – they’d been tipped off by Wage and Hour – and they carted offundocumented workers to jail and had deportation proceedings initiated againstthem. The INS agents brought along a list of pro-union employees, whichwas sent to them by a former INS district director for New York, Henry Dogin– now a lawyer for the factory owner.

Some immigration advocates argue that undocumented workers are attractiveto employers precisely because their precarious legal situation makes thempowerless to protest against poor pay or work conditions. In fact, evendocumented workers sometimes claim to be illegal because it increases thechance that they will be hired says Wing Lam, a director of the ChineseStaff Workers Association

Meanwhile, the Labor Department’s ongoing anti-sweatshop campaign hasdone little to stop abuses. Remember the infamous Kathy Lee Gifford scandalof 1996, when it was exposed that sweatshops in mid-Manhattan were manufacturingthe TV-star’s line of Wal-Mart clothing. Her fairy princess persona calledinto question, Kathy Lee shed public tears while husband Frank Gifford showedup at the factory handing out one hundred dollars bills to workers.

A fairy tale ending to be sure. But last December, another New York garmentfactory, producing not only for Wal-Mart but K-mart, Nordstrom and The Limited,was busted for sweatshop conditions. Retailers were monitoring the shop,but somehow missed the on-site labor abuses. So much for industry self-policing. CP